New law helps push Gentex stock to 20-year high

Sales of Gentex Corp.'s rear-camera display system will top 1 million next year, after U.S. safety officials Friday recommended such systems be standard equipment on every new car and light truck starting in 2014.

ZEELAND – Talk about making the right thing at the right time.

Auto-dimming mirror maker Gentex Corp. had already counted on its rear-camera display system to double in sales next year. But now, the sky may be the limit.

After federal safety officials called for such systems to be standard equipment by 2014, investors sent Gentex stock to at least a 20-year high of $27.17 Friday, before closing at $26.89, up $4.06, or nearly 18 percent, on Nasdaq.

The already-popular rear-camera product moved up the food chain, when federal officials proposed new safety rules Friday.

The National Highway Transportation Safety Administration recommended rear-camera systems as the best way for drivers to see the blind spot when they are backing up. The move is an effort to avoid driveway tragedies, when an child playing behind the vehicle, in a blind spot for the driver, is killed when the car backs up. By 2014, every new vehicle may be required to have such technology on board.

Earlier back-up safety plans included sonar technology that gives drivers an audible warning, but that less-costly system was not included in the latest proposed regulations.

“They obviously have said that will not meet the requirements,” said Connie Hamblin, Gentex vice president of investor relations.

Gentex already markets a system based on its interior-mirror prowess. Its rear camera display connects a video camera on the back of the vehicle with an LCD monitor built inside the rearview mirror. When the vehicle is put in reverse, the monitor shows through the mirror, using about one-third of the reflective real estate. In any other gear, the mirror is fully reflective.

The company has already ramped up to handle demand for the system, after child-safety rules were initially detailed in 2007. Sales of the rear camera displays doubled between 2009 and this year, and are expected to double again in 2011, topping 1 million units. Now, that pace could grow dramatically.

“This is something we know how to do, and do it well,” Hamblin said. The cost issue was one reason transportation officials may have initially included the sonar systems. Consumer costs for sonar back-up systems range from $200 to $250; vehicles equipped with rear-camera systems cost buyers $450 on average.

“We're kind of in a wait-and-see mode, like everybody else,” Hamblin said. “The fact is, they're not going to allow the audible sensors, at the low end. But there's also competition in this area, for where the display is going to go.”

About 15 percent of vehicles on the road today have rear-camera displays built into dashboard navigation systems. Some automakers are mulling multi-purpose displays for the center console, so the technology is in flux.

Gentex is sure its system, with the back-up zone shown through the eye-level rearview mirror, is the safest situation.

“The research we have shows that people prefer it in the rearview mirror,” Hamblin said. “GM did research with Virginia Tech that showed the number of incidences were fewer when the image was in the rearview mirror, compared to looking downward (at a built-in navigation system).”

Each year, about 292 deaths and 18,000 injuries are the result of back-over crashes. Roughly 44 percent of those deaths are children under five. The proposed rule is in a 60-day comment period.

The auto supplier has already hired 400 people this year, and are looking for another 150. Gentex is hosting a job fair from 9 a.m. To 5 p.m. Wednesday at the Doubletree Hotel, 650 E. 24th St., Holland. Applications are also being taken online at gentex.com/careers.

Last month, Gentex invested $4.5 million to acquire the vacant Invensys Controls plant in Holland Township, to consolidate circuit board production for all its products in one location.